Mortgage savings account

Morganben245

Hello all, 

So I’ve recently had my 1 year fixed term ISA come to an end for my mortgage savings accounts. The interest in that has now dropped to 1.14% this month. It has 12k in it. 

I am unsure now what to do with this now, Lloyds are offering me 4% on another 1 year fixed term but I know I can get a better offer somewhere else. I’ve looked into a Lifetime ISA but I am tied to only putting 4k in a year, I am looking to put away 1 to 1.5k a month so 12k plus a year away in this savings account so I am tied with most normal ISAs. 

Ive also already got the 2 monthly savers with Lloyds to max out interest but with them I am tied to £250 and £400 a month.

So I am seeking some advice on where would be best to open an account for my mortgage savings I currently have and to carry on building with, with a start of 12k and I am not tied to a max deposit a month.

Any help would be greatly appreciated on this Monday morning! 

Thankyou.

surreysaver

Mortgage savings account? What do you mean? Is it an offset mortgage?

eskbanker

Yes, 'mortgage savings account' could be interpreted various ways, but I think OP is simply meaning saving for a first property deposit, in which case it's highly likely to be beneficial to open a LISA, despite the cap on annual contributions, as the 25% government bonus dwarfs the incremental interest achievable elsewhere, assuming the purchase would be at least a year away and of a property valued below £450K.

Other accounts would be needed too:

https://www.moneysavingexpert.com/savings/best-cash-isa/
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Morganben245

surreysaver said:

Mortgage savings account? What do you mean? Is it an offset mortgage?

Apologies, I should’ve worded it better. 

I am saving to buy and put a deposit down on my first property. So I need advice on what savings account would be best to save for my deposit,

Thankyou

Morganben245

eskbanker said:

Yes, 'mortgage savings account' could be interpreted various ways, but I think OP is simply meaning saving for a first property deposit, in which case it's highly likely to be beneficial to open a LISA, despite the cap on annual contributions, as the 25% government bonus dwarfs the incremental interest achievable elsewhere, assuming the purchase would be at least a year away and of a property valued below £450K.

Other accounts would be needed too:

https://www.moneysavingexpert.com/savings/best-cash-isa/
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Yes correct, Thankyou. 

The purchase time I am looking at is late 2026/earky 2027 so yes over a year away and will be under 450k. 

My worry with the LISA is that when it comes to buying a property, I will only be able to use the money in this account which in the next 2 years will only reach a max of 10k? Am I correct? And i already have 12k saved and plan to save at least another 12k this calendar year. 

Looking back i wish i opened a LISA when i was 18 but we’ve got a big problem in this country with the education of mortgages/savings and anything money is no where to be seen unfortunately, I am only young still and trying to wrap my head around it all, Thankyou for your reply!

eskbanker

Morganben245 said:

My worry with the LISA is that when it comes to buying a property, I will only be able to use the money in this account which in the next 2 years will only reach a max of 10k? Am I correct?

No - firstly, you can use money from any number of savings accounts, so using LISA doesn't preclude use of other accounts too.

If you're buying in 2026/27, then you'd be able to get £12K paid or transferred into a LISA (£4K per tax year, including the current one), which would then be boosted to £15K by the addition of the government bonus, plus whatever interest you earn on it thereafter.

You'd certainly need other homes for the rest of your savings too, but the 25% bonus seems pretty irresistible to me if you'll be buying a first property that complies with the terms of the scheme (as above).

jimjames

Get more regular savers, you don't just need to stick to Lloyds ones